2017 – The beginning of grain monopolies

The beginning of the year will bring predictable changes in the agrarian economy. This is said by Sergey Feofilov, who is the director of the “UkrAgroConsult”.
The agrarian sector will also be affected by the inertial development of our country’s economy. The decline in revenues will lead to a reduction in investment due to which grain production is currently held.
To remain a participant of the raw materials market, it is important to take into account its key trends. One of them is the formation of monopolies. Feofilov compared the commodity market to the oil market and reminded that the oil prices could rise due to agreements between countries on the volume of the production.
The land market which will be opened in 2018, according to Feofilov could lead to a more active merger of agricultural enterprises. However, here the expert sees a problem in the possible opacity of this process.
If the growth in grain exports from Ukraine stabilizes and increases, it is necessary to look for new instruments that would control the quality of exported oilseeds and cereals.
At the same time, prices for these crops will not rise, but will remain at the same low level as in 2014-2016. The expert links this trend to the availability of large grain stocks and low consumption rates.

2017 was the year when grain monopolies started operating in Ukraine and Kazakhstan. These changes brought a lot of new things to the industry, but also raised doubts. Many experts believe that monopolies can negatively affect competition in the grain market, which in turn can lead to a decrease in grain exports. However, representatives of the monopolies argue that this is not the case and that monopolies will speed up the export process, optimize the supply chain and increase farmers’ incomes. In any case, the start of grain monopolies was one of the most significant events in the grain industry in 2017 and continues to be relevant for many market participants.